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the Court of Appeals for the Tenth Circuit in that case. Duke
Energy Natural Gas Corp. v. Commissioner, 172 F.3d 1255 (10th
Cir. 1999), revg. 109 T.C. 416 (1997). As explained below, we
follow our decision in Duke Energy, and we hold that the proper
recovery period for the gathering pipelines is 15 years.
II. Applicable Statutory and Administrative Provisions
Section 167(a) allows “as a depreciation deduction a
reasonable allowance for the exhaustion, wear and tear * * * of
property used in * * * [a] trade or business”. Section 167(b)
references section 168 for determination of the depreciation
deduction in the case of property to which section 168 applies.
Section 168 is entitled “Accelerated Cost Recovery System”, and
it sets forth a cost recovery system based not on the useful life
of an item of property but, instead, on certain congressionally
determined (accelerated) recovery periods. In pertinent part,
section 168(a) provides: “the depreciation deduction provided by
section 167(a) for any tangible property shall be determined by
using * * * the applicable recovery period”. Pursuant to section
168(c) and (e), the recovery period for property is based upon
(but, generally, is shorter than) its “class life”. Section
168(i)(1) defines “class life” as “the class life * * * which
would be applicable with respect to any property as of January 1,
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